What Are Concessions When Buying A Home [ LIMITED ]

To prevent artificial inflation of home prices, lenders and government agencies like Fannie Mae (1.4.2) and the Department of Housing and Urban Development (1.2.7) cap how much a seller can contribute. These limits are typically a percentage of the purchase price or appraised value, whichever is lower. What Are Seller Concessions?

: Offering a credit to cover specific repairs found during an inspection, such as an aging roof or water heater. what are concessions when buying a home

: Paying "points" upfront to lower the buyer's interest rate temporarily or for the life of the loan. To prevent artificial inflation of home prices, lenders

Sellers can agree to cover a wide variety of costs traditionally paid by the buyer. Common examples include: : Offering a credit to cover specific repairs

Rather than a direct price reduction, these concessions act as a credit at closing, reducing the "cash to close" a buyer needs to bring to the table. This guide explores how they work, what they cover, and the limits imposed by different loan types. Common Examples of Seller Concessions